PRESS BRIEFING BY PENGASSAN PRESIDENT,
COMRADE BABATUNDE O. OGUN ON MONDAY, AUGUST 4, 2008
THREE MONTHS OF PENGASSAN CURRENT
CENTRAL WORKING COMMITTEE LEADERSHIP
The Take off Point
The current leadership of the Association led by me, Comrade Babatunde O. Ogun came on Board at the Association’s 2 nd Triennial Delegates Conference of April 29-30, 2008 .
In line with the Association tradition, a 5-day Synergy Programme was skilfully packaged for the participants - Central Working Committee (CWC) members who were blended with the key staff as well as other serving and past leaders of the Association. The Synergy program is the Association’s way of organising preliminary induction to its Top Policy Makers which is aimed at getting them properly equipped and grounded on the strategic approach of contending with the myriads of issues and challenges in the Oil and Gas Sectors. Experienced Resource Facilitators that were on hand drilled the participants on the rudiments and basic tools that would guide them in initiating the appropriate policy decisions and in the implementation processes.
Key Tasks Identified
Key Industry Challenges that were identified as key focus for the Association includes:
- Niger Delta Security and Underdevelopment issues with respect to the responsibilities of Federal, State, Local Government and Agencies as well as Corporate Citizens and individuals in the provisions of Human and Physical Infrastructural needs for the regions;
- National Contents Development drive with greater emphasis to local Human Capacity Building, Empowerment and Entrepreneurship in line with the specified global standards required by the Sector, which is the primary reason for setting up the Petroleum Technology Development Fund (PTDF), Petroleum Training Institute (PTI) for middle level manpower; University of Petroleum Resources for high level manpower and College of Petroleum Studies for postgraduate and research studies.
- Environmental and Health Impacts Assessment on the Government’s inconsistencies to the Terminal Date for “Gas Flare Out”; and its Optimization Projects in Nigeria
- OGIC Reforms Policy for strengthening the Sector’s Institutional and Policy frameworks.
- Compliance with our Petroleum Acts provisions with respect to Operational Structures on Staffing especially in the Multinational Oil Companies.
- Exhibition of Transparency, Responsibility and Accountability on Joint Venture (JV) Agreements and Production Sharing Contracts (PSC).
- Downstream Oil Sector Deregulation and Liberalization Policy that is not driven by Local Production of Petroleum Products is no longer excusable; Petroleum Products Price Regimes that is driven by import parity is unacceptable.
- The challenges of Crude Oil movement and supplies to our Export Terminals and Refineries; and Petroleum Products movement to the various Depots which have been aggravated by the nefarious activities of pipeline saboteurs, vandals and illegal bunkerers.
- The threats to roads safety attributable to state of our roads’ maintenance and repairs which have been amplified by the incessant hazards of horrendous carnage resulting from petroleum products truck accidents/fires, the attendant monumental losses of lives, properties and precious man-hours.
- Violation and non compliance with Extant Laws, Collective Bargaining Agreements and Jointly agreed Communiqués.
- Unfair labour practices and anti-union tendencies that often lead to industrial conflicts and disruptions in the Industry.
- Fair and Equitable Treatment to Casual and Contract Staff in the Industry. We believe that the Federal Ministry of Labour owes the responsibility of ensuring that employers provide fair and equitable treatment and better welfare packages to all categories and gender of workers as provided under Section 17 of the Constitution of the Federal Republic of Nigeria.
APPROACH TO IDENTIFIED TASKS
The CWC was able to pay courtesy calls on almost all the key partners and stakeholders in the Industry, among who are the management in the Upstream, Downstream and Servicing companies, NNPC, DPR, NAPIMS as Regulators and Managers of Government assets and interests in the Sectors; the Refineries and PPMC were given special focus to check the current state of the plants and facilities on the ground.
The visit gave a lot of insight and informed perspectives on the issues that we raised with the Group Management Director (NNPC), Director, Department of Petroleum Resources, and NAPIMS; PTDF was engaged on its Capacity Building role while PPPRA was taken up on its commercial regulatory responsibility of guaranteeing petroleum products demand and supply equilibrium.
The policy makers like Speaker of the House of Representatives, Ministers of Labour and Energy were also visited and information exchanged on the key issues confronting the industry.
The general understanding reached with the Industry stakeholders listed includes:
- Reappraisal and Far Reaching decision that would dutifully address the crisis in the Niger Delta Region
- Effective pursuit of local content development drive with greater emphasis on human capacity building and empowerment
- Agreement on Partnership and Cooperation with the Association on issues of mutual interest.
- Agreement to ensure Participation of the Association in Policy issues
- Consultation of Association for Viewpoints
- Address to due process and rule of law
- Promotion of Political will for policy formulation and implementation.
- Enforcement of Compliance to Petroleum Acts
INDUSTRIAL AND LABOUR RELATIONS ISSUES
The current leadership came into office to meet a barrage of industrial and labour relations issues that require utmost / immediate attention and action.
Among other industrial relations issues that we have taken up includes:
- Mobil Producing Nigeria Unlimited industrial dispute which though was resolved to mutual satisfaction but with aftermath the require labour and Management post-mortem as a preventive action against future re-occurrence
- Chevron Nigeria Limited issues against Fred Nelson, the Company’s Managing Director allegation of violation of Safety Standard and Petroleum Act 1969 stipulation on Staffing Structure and Expatriate quota applications which was also addressed constructively and objectively with due regards for due process that was followed to the Presidency through the Energy Minister (Petroleum), the Group Managing Director, NNPC and a Committee led by the Group General Manager, NAPIMS
INTRIGUES IN THE DIVESTMENT OF 60% INTEREST OF CHEVRON CORPORATION IN CHEVRON OIL NIGERIA PLC: PENGASSAN POSITION.
Our Association, PENGASSAN in conjunction with our Sister Union, NUPENG as primary and strategic insider and partner in the Oil and Gas Industry has assiduously worked continuously with Government, Employers and other stakeholders to support Government policy reviews for efficient and optimal performance of resources and investment in the Oil and Gas Sector.
We have persistently expressed and shared the position that will bring about the desired positive intent of Government’s Liberalisation and Commercialisation policy in the Downstream Oil and Gas Sector which require that we eschew all sentiments, prejudice, favouritism and sacred cow syndrome which has regrettably stagnated our bewildered Sector for decades.
We have reiterated the need to uphold merit and expertise as key determinant of Core Investors as stipulated in the BPE Privatization and Commercialisation Act 1990.
Our concern as we speak is that there are intrigues that suggest that some of the potential buyers being considered as Core Investors for Chevron Oil Nigeria Plc are only proving relative financial capability, and not minding the Managerial and Technical Competences that shall also serve as key criteria.
So far we have keenly monitored and noted the followings:
- We observed that BNPARIPAS, Chevron Corporation, Management of Chevron Oil Nigeria Plc as Financial Consultants, divestor of the 60% Equity in transaction, and Management of Chevron Oil Nigeria Plc respectively are scheming to apply irrational and subjective overpricing and ethnic divide criteria rather than commercial responsibility and technical competences as basis to decide on the Core Investor that will take over the 60% Equity interest at stake, in Chevron Oil Nigeria Plc as a going concern.
- Aside of our members Shareholding interest along with remaining 40% of Nigerians in Chevron Oil Nigeria Plc, the issue of labour interest that would be affected by ownership change for which discussion are in process to settle all separation packages and other contingent liabilities of the company have to be resolved before the business can be effectively transferred in terms of true worth and state of affairs have been slowed down for lack of mandate.
- We are not confident that the technical and commercial evaluation process in the short listing of the potential buyers guarantees the selection of the most competent hands to effectively manage the company and thus protect the interest of the employers (including our members) who have spent most of their productive years in the service of Chevron Oil Nigeria Plc.
- We are worried about the focus being given to Potential Buyers that bid in excess of 300 percent over and above the floor trading price of 202 Naira is alarming. PENGASSAN as legitimate employees’ representative find this very disturbing, as this clearly implies that the potential buyers are going to incur the incredible bank charges and other related cost of capital to service the loans used to acquire the company. This means that the profitability of the company cannot be sustained amongst its peers within the industry, which will ultimately impair the company’s competitiveness and market shares thereby jeopardising the interest of the employees (including our members) of the Company.
- We have observed that some of the potential buyers do not have the organisational structure to manage the current calibre of employees and to also support the already existing best-practice corporate governance on which the Chevron Oil Nigeria Plc Workers’ Union prides itself locally and internationally.
Our Association therefore hereby state in very unequivocal terms as follows:
- That by our statutory responsibility and obligation that is being frustrated by the intrigues in ownership change, the Association will expect that all labour related issues are resolved before the ownership change is announced.
- That it is also our obligation to protect minority interest of our members as shareholders who in view of their vantage position have observed the detrimental effect of the ongoing ownership change process, hence we maintain that the following criteria be used as the parameter for the selection of the eventual potential buyers:
- Bench-markable technical and commercial evaluation process that guarantees the selection of the most competent hands to effectively manage the company and thus protect the interest of the employee (including our members) who have spent most of their productive years in the service of Chevron Oil Nigeria Plc.
- Competitive transaction process that projects into the threats to the going concern features of the Chevron Oil Nigeria Plc to the effect of realizing that the profitability of the company cannot be sustained amongst its peers within the industry at any incredible bid price which will ultimately impair the company’s competitiveness and market shares thereby jeopardising the interest of the employees (including our members) of the Company.
- PENGASSAN was advised in a very unambiguous terms, as one of the organisation that submitted bid for the Chevron Oil Nigeria Plc acquisition transaction, that the Potential buyers must have as key criteria for final consideration, the organisational structure to sustainably manage the current calibre of employees, and to also support the already existing best-practice corporate governance on which the Chevron Oil Nigeria Plc Workers’ Union prides itself locally and internationally.
- PENGASSAN also holds that competences of effective technical and commercial management of Plants, Installations, retail outlets networks that could sustain or exceed current market share efforts at facilitating equitable marketing and distribution of products across the country is key.
- The Association cannot compromise the criteria to keep competent staff, with regularly updated capacity building tools as required for empowered and motivated staff in order to guarantee deliveries and deliverable in safe, healthy and environmentally friendly manner in line with the HSE policy requirement of the Industry.
- The Association is mindful of potential buyers that would instill Confidence in Investors, Employees, Suppliers, Creditors and other Financiers;
- The Association is mindful of potential buyers that will foster good quality assurance, products compliant without compromise of standards
- The Association is mindful of potential buyers that will provide Customers Satisfaction.
- The Association is mindful of potential buyers that will ensure compliance with Extant laws on labour relations and other Statutory obligations;
- The Association is mindful of potential buyers that have a well articulated Corporate Social Responsibility programme that is particularly required in our community minded industry.
- The Association is mindful of potential buyers that that will keep to the Routine Environmental Impact Assessments of Operation in line with set standard for HSE practice.
- The Association is mindful of potential buyers with the vision, will and ability to foster backward integration arrangements for Local Refining in support of efforts for price regimes driven by local production.